A Not-For-Profit Organization Was the Recipient of a Significant Fixed

question 36

Multiple Choice

A not-for-profit organization was the recipient of a significant fixed asset donation. The assets, a building valued at $82,000, and one acre of land, valued at $210,000, are going to be used by the organization for office space and parking. The donor's net book value of the building was $22,000, and the land basis was $65,000. The not-for-profit organization's total basis for the assets should be

• A) $87,000.
• B) $104,000.
• C) $147,000.
• D) $292,000.

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Definitions:

Period Cost

Costs that are not directly tied to the production process and are expensed in the period in which they are incurred.

Plastic Parts

Components or materials made out of plastic, often used in manufacturing and production of various goods.

Direct Materials

Essential parts that directly contribute to the fabrication of particular merchandise or services.

Product Cost

The total amount incurred to manufacture a product, including direct materials, labor, and overhead expenses.